When Value Investing Embraces Human Behavioural Patterns
In reviewing one philosophical avenue to funds management, Merlon Capital Partners CEO Neil Margolis examines the nexus of human behaviour, ESG, and value investing.
Investing in undervalued companies, or “value investing”, has staged a comeback in recent years, after struggling during the “cheap money” era between the Global Financial Crisis and the record monetary and fiscal stimulus during the Covid pandemic.
We would argue value investing based on free cash flow has performed well through several market cycles and has displayed low levels of volatility when compared to traditional classifications of value such as earnings, book value, and dividends.
This material has been provided by Merlon Capital Partners Pty Ltd ABN 94 140 833 683, AFSL 343 753 (Merlon), the investment manager of the Merlon Australian Share Income Fund and the Merlon Concentrated Australian Share Fund (Funds). It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Any projections are based on assumptions which we believe are reasonable but are subject to change and should not be relied upon. Past performance is not a reliable indicator of future performance. Neither any particular rate of return nor capital invested are guaranteed.